TIDMGETS
At its meeting on Wednesday 29 February 2012, the board of
directors, chaired by Jacques Gounon, finalised the accounts for
the year ended 31 December 2011.
Jacques Gounon, Chairman and Chief Executive Officer of Groupe
Eurotunnel SA, stated:
"In 2011, the Eurotunnel Group made a clear profit and generated
significant cash flows despite the uncertain economic climate. The
outlook is positive and, as a sign of our confidence in the future,
we will ask the shareholders to vote at the AGM for the doubling of
the dividend to EUR0.08 for the 2011 financial year."
IMPORTANT EVENTS IN THE PAST YEAR
-- Dynamic cash flow managementEurotunnel continues to
generate a significant operating cash flow.
-- Added value for shareholdersFollowing the conversion of
the 2007 Warrants4 which enabled shareholders to benefit
from the increase in value achieved within the Eurotunnel Group
and
the various transactions to simplify its financial structure,
Groupe
Eurotunnel SA (Paris:GET) (LSE:GETS) has a capital composed of
561
million shares compared to maximum of 613 million projected in
2007.
Since the financial restructuring in 2007 and following the
final
exercise of the 2007 Warrants the combined effect of the
transactions
completed has led to an increase in value of almost 9%.
-- Purchase of EUR147 million5 of floating rate
notesGroupe Eurotunnel SA has taken advantage of its
significant cash reserves to optimise the management of its
debt, by
buying EUR147 million of discounted notes. This represents a
full-year
reduction in interest charges estimated at EUR5 million in 2012.
The
nominal value of the long term debt less the floating rate notes
is
EUR3.6 billion. The long term debt to asset ratio is 56.4%.
-- The cross-Channel Fixed LinkIn 2011 almost 19 million people and approximately 17.7 million
tonnes of freight crossed the Channel using the Tunnel.Sustained
growth in Passenger and Truck Shuttle activity.Eurotunnel won the
IFW Environment Award, for Leadership in
Sustainable Development at the awards ceremony organised by
International Freighting Weekly, Europe's leading transport
and
logistics publication.2% increase in the number of Eurostar
passengers to nearly 9.7
million in 2011.Commissioning of four SAFE stations (fire
suppression zones), a
major innovation to further strengthen the safety of the
Channel
Tunnel.
-- EuroporteGB Railfreight, the UK subsidiary of Europorte and third
largest rail freight operator in the UK, won the top prize
for
Freight and Logistics at Rail Magazine's National Rail Awards
2011.A positive contribution to 2011 revenues (EUR158 million).
Europorte's offer is based on punctuality and quality of
service,
which ensured the continuation of all existing contracts for
Europorte France and the signing of new contracts, notably
with
leading European transport and logistics operator
GEFCO.Acquisition of 28 locomotives, notably the Vossloh Euro
4000
diesel-electrics, currently the most powerful in Europe.The
recruitment of c.100 drivers in France as part of the
strategy to develop sustainable freight transport and to
generate
skilled jobs.
-- CIFFCO (Centre International de Formation Ferroviaire de la Côte
d'Opale)6Creation of the first private training centre
specialising in
railway skillsThis is the first time that a privately
owned transport group has created such a training centre, open
to
all European railway and infrastructure maintenance companies
and
their subcontractors, as well as those from neighbouring
countries. CIFFCO is accredited by the French Public Safety
authority (EPSF) and delivers courses for fifteen different
skills. It is able to provide training for technicians working
on
the French national network as well as those of neighbouring
countries.
FINANCIAL RESULTS
At EUR403 million, the operating margin (EBITDA) increased
compared to 2010 as a result of good cost control and the trading
profit increased by EUR70 million to EUR247 million in 2011
(+40%)7.
Operating profit (EBIT) also increased, by EUR85 million,
including insurance indemnities totalling EUR29 million relating to
the fire in September 2008.
In 2011, the available cash flow enabled the payment of a
dividend (EUR21 million), the purchase of variable rate notes
issued by Channel Link Enterprises Finance (CLEF, the debt
securitisation structure), for EUR128 million, the purchase of own
shares (EUR40 million) and capital expenditure of EUR98 million. At
31 December 2011, cash and cash equivalents amounted to EUR276
million.
OUTLOOK
-- The Queen's Jubilee in June 2012: bookings taken for this long weekend
are already on the increase. The number of booths available will
be
more than doubled to ease passport controls and improve speed
and
traffic flow, always an objective of the business.
-- London 2012 Olympic Games: the Eurotunnel Group is preparing itself to
manage the waves of passengers and will speed up Shuttle
crossing
times to just 30 minutes, instead of the normal 35 minutes.
Shuttle
speed will be increased to 100 mph compared to 90 mph today.
-- The upturn in activity appears to be continuing, but will remain
gradual according to the segment. In the medium term, the
Group
remains confident in its ability to generate sustainable growth
and,
through the development of its different vectors for growth,
to
improve its resistance and responsiveness to the vagaries of
the
economy.
-- Eurotunnel maintains its interest in the purchase of the three
ex-Seafrance ferries. The Group is organising the resources
necessary
to develop this new activity in line with its criteria for
profitability and for the benefit of the Nord-Pas-de-Calais
region.
REVIEW OF FINANCIAL THE FINANCIAL SITUATION AND CONSOLIDATED
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011
Pursuant to EC Regulation 1606/2002 of 19 July 2002 on the
application of international accounting standards, the consolidated
financial statements of GET SA for the financial year ended 31
December 2011 have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European
Union at 31 December 2011.
The following information relating to Groupe Eurotunnel SA's
financial situation and consolidated results must be read in
conjunction with the consolidated financial statements contained in
paragraph 20.3.1 of the 2011 Registration Document.
1.Comparison of financial years ended 31 December 2010 and 31
December 2011
EUR million 2011 2010 % 2010
(*)restated change published
Exchange rate EUR/GBP 1.148 1.148 1.169
Shuttle Services 399 362 +10 % 366
Railway network 278 261 +7 % 263
Other revenue 10 10 = 10
Sub-total Fixed Link 687 633 +9 % 639
Europorte 158 97 +63 % 98
Revenue 845 730 +16 % 737
Other income 9 - -
Total turnover 854 730 +17 % 737
External operating expenses (267 ) (232 ) +15 % (235 )
Employee benefits expense (184 ) (165 ) +12 % (166 )
Operating margin (EBITDA) 403 333 +21 % 336
Depreciation (156 ) (156 ) = (156 )
Trading profit 247 177 +40 % 180
Other net operating income 25 10 10
Operating profit (EBIT) 272 187 190
Income from cash and 4 7 7
cash equivalents
Gross cost of servicing debt (268 ) (253 ) +6 % (255 )
Net cost of financing (264 ) (246 ) +7 % (248 )
and debt service
Other net financial income 3 1 1
and income tax expense
Result for the year: 11 (58 ) (57 )
profit/(loss)
EBITDA(**)/revenue 46.6 % 45.6 %
*In order to enable a better comparison between the two years,
the 2010 consolidated income statement presented above has been
recalculated at the exchange rate used for the 2011 income
statement of GBP1 = EUR1.148.
**EBITDA less other income (EUR9 million in 2011).
Key figures: income statement
The figures relating to 2010 take into account the activity of
GB Railfreight Limited (GBRf) from the date of its acquisition on
28 May 2010. However, in order to allow a better comparison between
2010 and 2011, in the remainder of this chapter, the expression
"like-for-like" means that the comparative figures have been
adjusted to include GBRf's revenues (EUR28 million) and operating
expenses (EUR27 million) for the period January to May 2010.
Summary
Groupe Eurotunnel SA's consolidated revenue for the 2011
financial year was EUR845 million, an increase of EUR115 million
(16%) compared to 2010. On a like-for-like basis (after restatement
for inclusion of GBRf's revenues of EUR28 million for the first
five months of 2010), the Eurotunnel Group's revenue increased by
EUR87 million (11%) as a result of growth in activity for both the
Fixed Link and Europorte (EUR54 million and EUR33 million
respectively). In 2011, the Group accounted for EUR9 million of
other income in respect of indemnities against operating losses
resulting from the fire in 2008 following payments received from
insurers during the year. Operating costs totalled EUR451 million,
an increase of EUR27 million on a like-for-like basis. The
operating margin and the trading profit increased by EUR70 million
to EUR403 million and EUR247 million respectively. After taking
into account other net operating income of EUR25 million (of which
EUR20 million related to the final compensation for the rolling
stock destroyed in the fire), the operating profit amounted to
EUR272 million, an improvement of EUR85 million of which a total of
EUR29 million related to insurance indemnities for the fire in
2008. The net cost of financing and debt service increased by 7%
mainly as a result of the effect of the increase in inflation rates
on the revaluation of the nominal value of the index-linked tranche
of the debt, although the interest paid remained relatively stable
at EUR211 million. Groupe Eurotunnel SA's consolidated net result
in 2011 was a profit of EUR11 million compared to a loss of EUR58
million in 2010 (restated at a constant exchange rate).
Free Cash Flow8 generated in 2011 amounted EUR132 million
compared to EUR112 million in 2010. At 31 December 2011, the Group
held cash balances of EUR276 million compared to EUR316 million at
31 December 2010, after the purchase of EUR128 million of floating
rate notes, the purchase of EUR40 million of treasury shares and
EUR98 million of capital expenditure.
1.1.Revenues
At EUR687 million, revenues for the Fixed Link for the 2011
financial year grew by EUR54 million (9%) compared to 2010 at a
constant exchange rate. At EUR158 million, the Europorte segment's
revenues increased by EUR61 million. On a like-for-like basis,
Europorte's revenues increased by EUR33 million (26%). The Group's
consolidated revenues totalled EUR845 million, an increase of
EUR115 million (16%) compared to 2010. On a like-for-like basis,
the Group's revenues increased by EUR87 million (11%).
a)Fixed Link revenues
i) Shuttle Services
Traffic 2011 2010 %
change
Truck Shuttle 1,263,327 1,089,051 +16%
Passenger Shuttle
Cars* 2,262,811 2,125,259 +6%
Coaches 56,095 56,507 -1%
*Includes motorcycles, vehicles with trailers, caravans and
camper vans.
Compared to 2010, Shuttle Services revenues increased by 10% in
2011, to EUR399 million.
Truck Shuttle
After a return to growth in 2010 (+3%), the Short Straits
cross-Channel truck market continued to grow in 2011 at an
estimated 5% compared to 2010. Nevertheless, it remains about 12%
below 2007, prior to the economic crisis. The number of trucks
transported by the Shuttles in 2011 increased by 16% compared to
2010 and the Truck Shuttle's market share improved by about 3.5
points to reach more than 38% and stabilise at a level similar to
that of before the fire in 2008.
Passenger Shuttle
The Short Straits cross-Channel car market contracted slightly
(c.-0.4%) in 2011 compared to 2010 when it was boosted by the
consequences of the eruption of the Icelandic volcano on air
transport. Despite this decline in the market, Le Shuttle's traffic
continued to grow: the number of cars transported in 2011 increased
by 6% and its market share improved by about 3 points to more than
46%.
The coach market also contracted slightly in 2011, leading to a
reduction in Eurotunnel's coach traffic of 1% compared to 2010.
ii) Railway network
Traffic 2011 2010 %
change
Passenger trains (Eurostar)
Passengers* 9,679,764 9,528,558 +2%
Rail freight trains**
Number of tonnes 1,324,673 1,128,079 17%
Number of trains 2,388 2,097 14%
* Only passengers travelling through the Channel Tunnel are
included in this table, excluding those who travel between
Paris-Calais and Brussels-Lille.
**Rail freight services by train operators (DB Schenker on
behalf of BRB, the SNCF and its subsidiaries, and Europorte) using
the Tunnel.
The Eurotunnel Group earned revenues of EUR278 million from the
use of its Tunnel railway network by Eurostar passenger trains and
the freight train services of the rail companies in 2011, an
increase of 7% compared to 2010.
In 2011, the number of Eurostar passengers using the Tunnel
reached 9.68 million, an increase of 1.6% compared to 2010 which
benefitted from the transfer of some air traffic following the
eruption of the Icelandic volcano.
After a year of repeated disruptions to rail freight traffic and
the ending of wagonload services in 2010, the creation of new rail
freight services using the Tunnel in 2011 has resulted in a growth
in traffic compared to 2010 of 14% in terms of the number of trains
and of 17% in terms of tonnage transported. This growth includes
both the creation of new intermodal services and the short term
transportation of steel during the second and third quarters.
b)Europorte revenues
At EUR158 million in 2011, Europorte's revenues increased by
EUR61 million compared to 2010. On a like-for-like basis,
Europorte's revenues increased by EUR33 million (26%), driven by
the start-up of new contracts and increased activity in existing
contracts, mainly for GBRf and Europorte France.
1.2.Other income
Other income corresponds to insurance indemnities relating to
operating losses following the fire in September 2008. Income of
EUR9 million was accounted for in 2011 following payments received
from insurers. In the context as described in note A.3 to the
consolidated financial statements in paragraph 20.3.1 of the 2011
Registration Document, no additional income has been accounted for
in 2011.
1.3.Operating margin (EBITDA)
The operating margin of EUR403 million has increased by EUR70
million (21%) compared to 2010, of which EUR9 million was due to
insurance indemnities relating to the fire in September 2008
received and accounted for in 2011. EBITDA less other income
expressed as a percentage of revenue was 46.6% in 2011 compared to
45.6% in 2010.
a)External operating expenses
At EUR267 million in 2011, external operating expenses increased
by EUR5 million (15%) compared to 2010. At a constant exchange rate
and on a like-for-like basis, external operation charges increased
by EUR16 million (7%) mainly due to:
-- a EUR24 million increase in Europorte's costs associated with the growth
in their activity and the investment in training of train
drivers
prior to the start of new contracts in 2012, and
-- an EUR8 million decrease in Fixed Link's costs mainly due to the
reduction in insurance premiums and local French taxes
partially
offset by a small increase in the cost of electricity and
maintenance.
b)Employee benefits expense
Employee benefits expenses in 2011 totalling EUR184 million
increased by EUR19 million compared to 2010. At a constant exchange
rate and on a like-for-like basis, they increased by EUR11 million
of which EUR2 million was in respect of the Fixed Link and EUR9
million in respect of Europorte and its subsidiaries, reflecting
the increased staff numbers resulting from their growth in
activity.
1.4.Operating profit (EBIT)
The depreciation charge for 2011 remained stable in total
compared to 2010, the increase resulting from the investment in
rolling stock by Europorte's subsidiaries being offset by a small
decrease in the depreciation of other assets.
The EUR25 million of other net operating income mainly consisted
of EUR20 million of insurance indemnities received in respect of
final compensation for rolling stock considered irreparable
following the fire in 2008 and which was written off during the
2008 and 2009 financial years.
The operating result in 2011 was a profit of EUR272 million
compared to EUR187 million in 2010, an improvement of EUR85 million
of which EUR15 million related to other operating income.
1.5.Net cost of financing and debt service
Income from cash and cash equivalents decreased by EUR3 million
in 2011, 2010 having benefitted from the receipt of penalty
interest in respect of a VAT reimbursement which has been partially
offset by EUR0.8 million of interest received on the floating rate
notes purchased in the second half of 2011 (see notes A.2 and P.2
to the consolidated financial statements in paragraph 20.3.1 of the
2011 Registration Document).
At EUR268 million in 2011, the gross cost of servicing debt
increased by EUR15 million compared to 2010 at a constant exchange
rate as a result of the unusual and historically high level of
inflation rates in the UK (5.4% for 2011 compared to an average of
just under 3% between 2007 and 2010 due in particular to the effect
of the increase in VAT) and the resulting effect on the nominal
amount of the index-linked tranche of the debt. By way of example,
a variation of 1% in the inflation rate would have an impact of
EUR12 million on the amount of the principal of tranches A1 and A2.
This increase in interest charges has no effect in 2011 on the cash
flows relating to interest and related hedging payments on the Term
Loan which remain relatively stable at EUR211 million (see
paragraph 10.2 of the 2011 Registration Document) as the effect of
the indexation on the nominal gives rise to cash payments only upon
repayment of the debt.
1.6.Net result
The net consolidated result for Groupe Eurotunnel SA in 2011 was
a profit of EUR11 million compared to a loss of EUR58 million in
2010 (restated at a constant exchange rate).
2.Cash flows in 2011 and 2010
EUR million Year ended Year ended
31 December 31 December
2011 2010
Exchange rate EUR/GBP 1.197 1.162
Net cash inflow from trading 418 353
Other operating cash flows and taxation (2 ) 3
Net cash inflow from operating activities 416 356
Net cash outflow from investing activities (77 ) (70 )
Net cash outflow from financing activities (387 ) (226 )
(Decrease)/increase in cash in year (48 ) 60
In total, the net cash outflow in 2011 was EUR48 million
compared to a net cash inflow of EUR60 million in 2010, largely as
a result of financial operations to buy floating rate notes and GET
SA shares. Before financing, the net cash inflow was EUR339 million
compared to EUR286 million the previous year, an improvement of
EUR53 million.
a)Cash flow from operating activities
At EUR418 million the net cash inflow from operating activities
increased by EUR65 million in 2011 compared to 2010. This increase
is mainly explained by:
-- an increase in Fixed Link revenue receipts of EUR47 million, mainly for
Shuttle Services,
-- an increase of EUR36 million in the amount received from insurers in
respect of operating losses and material damage relating to the
fire
in September 2008,
-- an increase of EUR15 million in Fixed Link operating expenses, and
-- a net decrease of EUR4 million in Europorte's operating cash flows.
b)Cash flow from investing activities
At EUR77 million in 2011 cash flow from investing activities
increased by EUR7 million compared to 2010, and comprised
mainly:
-- EUR98 million of capital expenditure (EUR50 million in 2010), EUR51 million
of which related to Fixed Link activities (EUR45 million in
2010); the
remaining EUR47 million primarily being invested in the
acquisition of
new locomotives for the Europorte businesses as part of
their
development plan. The Group is currently studying the
possibility of
partially refinancing these locomotives,
-- a receipt of EUR20 million relating to compensation for rolling stock
destroyed during the fire in 2008 (EUR6 million received in
2010).
Note that the figure for 2010 included net payments of EUR28
million for the acquisition of the subsidiaries purchased in 2009
and 2010.
c)Cash flow from financing activities
In 2011, cash outflows from financing activities amounted to
EUR387 million, compared to EUR226 million in 2010. The difference
is largely explained by the cost of acquiring the floating rate
notes (see notes A.2 and P.2 to the consolidated financial
statements contained in paragraph 20.3.1 of the 2011 Registration
Document) and treasury shares in 2011. Cash flows from financing
activities in 2011 principally comprised:
-- EUR211 million interest paid on the Term Loan and associated hedging
transactions (EUR206 million in 2010), the effect of the
indexation of
the nominal giving rise to cash payments only on its
repayment),
-- EUR128 million for the acquisition of the floating rate notes,
-- EUR40 million on acquiring treasury shares,
-- EUR21 million paid in dividends (EUR18 million paid in 2010),
-- EUR4 million of interest received (EUR9 million in 2010), and
-- EUR10 million received from the exercise of the 2007 Warrants.
3.Debt service cover ratios
The debt service cover ratio and the synthetic service cover
ratio for Groupe Eurotunnel SA at 31 December 2011 were 1.72 and
1.52 respectively, and thus the financial covenants for the period
were respected.
4.Long Term Debt to Asset Ratio
The Group defines its Long Term Debt to Asset Ratio as the ratio
between long-term financial liabilities less the value of the
floating rate notes which were purchased during 2011 as a
percentage of tangible fixed assets. At 31 December 2011, the ratio
remained stable at 56.4% compared to 56.1% at 31 December 2010.
EUR'000 31 December 31 December
2011 2010
Exchange rate EUR/GBP 1.197 1.162
Long term financial liabilities A 3,871,622 3,753,824
Other financial assets: B 131,931 -
floating rate notes
Long term financial liabilities A-B=C 3,739,691 3,753,824
less other financial assets
Tangible fixed assets: property, D 6,626,841 6,691,232
plant and equipment
Long Term Debt to Asset Ratio C/D 56.4% 56.1%
5.Free Cash Flow
The Group defines its Free Cash Flow as net cash flow from
operating activities less net cash flow from investing activities
(excluding the acquisition of shareholdings in subsidiary
undertakings) and net cash flow from financing activities relating
to the service of the debt (Term Loan and hedging instruments) plus
interest received (on Cash and cash equivalents).
EUR'000 31 December 31 December
2011 2010
Exchange rate EUR/GBP 1.197 1.162
Net cash inflow from operating activities 415,983 356,400
Net cash outflow from investing activities (77,377 ) (70,476 )
Acquisition of shareholdings - 28,658
in subsidiary undertakings
Interest paid on the NRS - (5,712 )
Interest paid on the Term Loan (161,525 ) (151,622 )
Interest paid on the hedging instruments (49,063 ) (53,896 )
Interest received on cash and cash equivalents 3,421 8,920
Interest received on other financial assets 698 38
Free Cash Flow 132,137 112,310
Forthcoming events in 2012:
18 April 2012: traffic and revenue for first quarter of 201226
April 2012: Groupe Eurotunnel SA AGM
Additional information:
Groupe Eurotunnel files its annual financial report for the year
ending 31 December 2011 with the Autorité des marches financiers
(AMF). Groupe Eurotunnel SA's consolidated and company accounts for
the year ended 31 December 2011 were finalised by the board of
directors on 29 February 2012.
Status of the accounts for the year 2011, in respect of the
statutory audit: accounts certified.
This press release and the 2011 Registration Document (including
Groupe Eurotunnel SA's annual accounts for the year ended 31
December 2011) will be available on our website:
www.eurotunnelgroup.com under the heading "regulatory
information".
1 The figures for the Group's consolidated income statement in
2010 have been recalculated at the average exchange rate for 2011
(GBP1=EUR1.148), to enable a better comparison between the two
periods.
2 Like for like, taking account of the GB Railfreight revenues
for the period from January to May 2010 (before its acquisition by
the Eurotunnel Group on 28 May 2010), the growth in the Group's
consolidated revenue is 11%.
3 The Group defines its long term debt to asset ratio as the
ratio between long-term financial liabilities less the value of the
floating rate notes which were purchased during 2011 as a
percentage of tangible fixed assets. At 31 December 2010 the ratio
was 56.1%. The calculation of this ratio is set out in section 4
below.
4 Warrants for shares issued in 2007: securities note approved
by the Autorité des marches financiers (AMF) on 4 April 2007 (visa
n° 07-113) and delisted from the NYSE Euronext Paris market before
opening on 2 January 2012.
5 Calculated at the exchange rate at 31 December 2011 of
GBP1=EUR1.197.
6 The Opal Coast International Railway Training School
7 Includes insurance indemnities of EUR9 million relating to the
operating losses following the fire in September 2008
8 The Group defines its Free Cash Flow as net cash flow from
operating activities less net cash flow from investing activities
(excluding the acquisition of shareholdings in subsidiary
undertakings) and net cash flow from financing activities relating
to the service of the debt (Term Loan and hedging instruments) plus
interest received (on Cash and cash equivalents). The calculation
is shown in section 5 below.
For media enquiries
John Keefe Consultant, + 44 (0) 1303 284491
press@eurotunnel.com
or
For investor enquiries
Michael Schuller, +44 (0) 1303 288749
Michael.schuller@eurotunnel.com
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